In this paper exergy analysis of two-stage vapour compression refrigeration (VCR) system has been carried out with an objective to evaluate optimum inter-stage temperature (pressure) for refrigerants HCFC22, R410A and R717. A thermodynamic model based on the principles of mass, energy and exergy balances is developed for this purpose. The computed results illustrate the effects of evaporation and condensation temperatures, isentropic efficiencies of compressors, sub-cooling of refrigerant and superheating of suction vapour on optimum inter-stage saturation temperature (pressure). The optimum inter-stage saturation temperatures (pressures) for HCFC22 and R410A are proximate to arithmetic mean of evaporation and condensation temperatures (AMT) when assuming superheating of suction vapour and non-isentropic compression processes in low-pressure and high-pressure compressors. The optimum inter-stage saturation temperatures (pressures) for HCFC22 and R410A are near to geometric mean of evaporation and condensation temperatures (GMT) when it is assumed that cycle involves the effects of sub-cooling, superheating of suction vapour and non-isentropic compression of the suction vapour. The optimum inter-stage saturation temperature (pressure) for R717 is close to GMT irrespective of sub-cooling, superheating of suction vapour and non-isentropic compression in the cycle. The efficiency defects, computed corresponding to optimum inter-stage temperature in condenser is higher in comparison to the other components. Finally, it is deduced that R717 is a better alternative refrigerant to HCFC22 than R410A in two-stage VCR system. Copyright (C) 2009 John Wiley & Sons, Ltd.